4 Reasons Why the Ethereum (ETH) Price Could Keep Soaring in the Near Future


TL;DR

  • Ethereum’s recent price surge coincides with a shift towards self-custody and an anticipated blockchain upgrade.
  • ETH’s valuation might also be positively impacted by regulatory developments, among other reasons.

Abandoning Exchanges

The price of Ethereum (ETH) has increased significantly in the past several weeks, recently surpassing the $3,000 milestone for the first time since the spring of 2022. Some on-chain metrics suggest that the asset might be poised for a further rally.

According to CryptoQuant data, Ethereum’s exchange netflow has been predominantly negative in the past month, charting massive red candles in the last few days.

 

ETH Exchange Netflow
ETH Exchange Netflow, Source: CryptoQuant

Shifting from centralized platforms to self-custody methods is considered bullish as it might signal the investors’ long-term commitment to hold their stash. It also reduces the immediate selling pressure.

That trend could drive innovation in services that make self-custody more accessible to the broader audience, which might attract new users and encourage existing investors to increase their exposure.

The Upcoming Upgrades

Another factor hinting that ETH’s price could pump even more in the near future is the approaching Dencun upgrade. It is scheduled to take place in March and focuses on increasing the efficiency, scalability, and security of the Ethereum blockchain, making it more competitive to rival networks such as Solana.

Vitalik Buterin described the upgrade as a considerable development for his brainchild and the Layer-2s associated with it.

Dencun marks the beginning of “The Surge” era in the Ethereum roadmap – a process that follows the historical transition from Proof-of-Work consensus algorithm to Proof-of-Stake, known as “The Merge.”

The integration of Verkle Trees on the Ethereum blockchain is also highly anticipated. It is expected to decrease disk space requirements, enhance the functionality of staking nodes, and improve the overall user experience.

A Possible ETH ETF

Bitcoin took the main stage earlier this year when the US Securities and Exchange Commission (SEC) finally gave the thumbs up on numerous spot BTC ETFs (including BlackRock’s application).

The products allow individuals to gain exposure to the primary cryptocurrency via a regulated financial company without having to buy it directly. For their part, BTC ETF providers need to purchase amounts of the asset to back the shares they offer to investors.

Bitcoin’s price surpassed the $50,000 mark weeks after the approval. However, its real ascend seems to have started more or less when BlackRock introduced its intentions to hop on the bandwagon, thus creating significant hype among industry participants. BTC’s price has skyrocketed by a whopping 100% since the company joined the race.

Some might argue that ETH is currently in that buildup zone, with more room to grow. On the other hand, the possible approval of a spot Ethereum ETF might lead to the same immediate “sell-the-news” event witnessed after the BTC ETF approvals.

BlackRock, Franklin Templeton, Grayscale, and others are among the financial behemoths that have filed to launch such a product. Those willing to dive deeper into the matter could take a look at our dedicated video below:

The BTC Halving

Last but not least, we will focus on the Bitcoin halving slated to take place in April this year. The event happens approximately every four years and slashes the miners’ block rewards in half. It reduces the rate at which new BTC is minted, potentially making them more valuable if following the economic fundamentals of supply and demand (in theory).

Historically, the halving has been followed by a BTC bull run, which has positively impacted the entire market. Ethereum’s price reached an all-time high of over $4,800 a year and a half after the last such event. Its peak also coincided with BTC’s ATH of almost $70,000.



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